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Friday's Bank Stocks: Market potentially 'overstating' expected Trump impact

U.S. bank stocks, along with broader markets, closed higher Friday, Dec. 23, before the holiday weekend, while thrift stocks closed slightly lower.

The SNL U.S. Bank Index expanded 0.29% to 540.12, while the SNL U.S. Thrift Index decreased 0.06% to 966.90. The Dow Jones Industrial Average advanced 0.07% to 19,933.81, the S&P 500 increased 0.13% to 2,263.79 and the Nasdaq composite index grew 0.28% to 5,462.69.

James Marple, senior economist at TD Bank, noted that the economic data this week has been pretty good for the U.S., with better-than-expected GDP, and personal spending a little bit weaker but still good.

In addition, Marple thinks that, "if everything goes perfectly," the Fed will be able to raise rates as planned, however there are a lot of factors that can pose a potential downside risk, including an increase in the U.S. dollar's strength.

"I think in all likelihood the Fed may raise one or two times, but I think we will probably see, as we did this year, something getting in the way of 'everything going according to plan,'" he said.

Furthermore, Marple is expecting modest economic growth under the new U.S. presidential administration. "I don't think that there will be any miracles. I think there is a good potential that the market is overstating some of the fiscal impact that may come out of Washington," he said.

He thinks that there is a chance of some negative impacts on market growth under the new administration as well. "[There is] some chance of tax reform but we also have a lot of talk about other measures that may actually be negative for growth including raising tariffs and kind of moving into a protectionist stance," he added.

Among the nation's biggest banks, JPMorgan Chase & Co. was up 0.18% to $87.05, Wells Fargo & Co. ticked up 0.38% to $55.96, Bank of America Corp. rose 0.27% to $22.60 and Citigroup Inc. gained 0.83% to $60.99.

Among notable movers, Boston Private Financial Holdings Inc. increased 3.69% to $16.85; Aurora, Ill.-based Old Second Bancorp Inc. gained 3.18% to $11.35; Frankfort, Ky.-based Farmers Capital Bank Corp. rose 3.07% to $43.70; and Helena, Mont.-based Eagle Bancorp Montana Inc. fell 3.02% to $20.90.

In the thrift sector, Westbury, N.Y.-based New York Community Bancorp Inc. ticked down 0.75% to $15.79; Lake Success, N.Y.-based Astoria Financial Corp. slid 0.91% to $18.55; and San Diego-based BofI Holding Inc. climbed 3.10% to $28.95.

In domestic economic news, sales of new single-family houses in the U.S. rose 5.2% month over month to a seasonally adjusted annual rate of 592,000 in November, compared to a revised October rate of 563,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported.

The final December reading of the University of Michigan consumer sentiment index was 98.2, up approximately 4.7% from 93.8 in November.

Market prices and index values are current as of the time of publication and are subject to change.